In the past few months, the Federal Circuit decided two cases addressing the issue of divided patent infringement in the healthcare field. In both Medgraph, Inc. v. Medtronic, Inc. and Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., the Federal Circuit applied the Akamai standard for divided infringement to determine whether patient conduct may be attributed to a physician or third party when determining liability.1 Although the outcomes differ, these cases taken together provide some additional guidance for evaluating divided infringement under the Akamai standard.
Infringement of a patented method claim requires performance of all of the steps of the claimed method.2 Typically, an actor may be liable for direct infringement when the actor performs every claimed step of the method.3 However, when the steps of a method are divided between two or more actors, one actor may be liable for the conduct of others under the doctrine of divided infringement.4 The Federal Circuit and Supreme Court established a new standard for divided infringement in the Akamai v. Limelight series of decisions spanning from 2010 to 2015.5
Under divided infringement, an alleged infringer may be held responsible for another’s conduct when that conduct is “attributable” to the infringer, i.e. when the infringer “directs or controls” the other party’s conduct.6 Because attribution is a question of fact, courts historically reviewed the evidence for indications of an agency or legal relationship between the parties.7 In Akamai V, the Federal Circuit unanimously expanded the circumstances in which the controlling party may be liable for infringement.8 The decision added an additional two-step analysis, where liability is appropriate if the alleged infringer “ conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and  establishes the manner and timing of that performance.”9
The Federal Circuit also held that members of a joint enterprise may similarly be liable for direct infringement when all of the claimed method steps are performed by the members of the joint enterprise.10 A joint enterprise requires four elements: “(1) an agreement, express or implied, among the members of the group; (2) a common purpose to be carried out by the group; (3) a community of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.”11
Medgraph, Inc. v. Medtronic, Inc.
Medtronic manufactures and markets diabetes management solutions, including insulin pumps and software for both patients and healthcare professionals under its CareLink® Therapy Management System for Diabetes. Using Medtronic’s devices and software, patients may collect blood sugar data and provide that data to their healthcare providers. Medgraph filed suit against Medtronic, alleging infringement of Medgraph’s method patent because every step of its patent was performed by or attributable to Medtronic.12
Without evidence to suggest an agency or contractual relationship, the Federal Circuit evaluated the facts under the Akamai two-prong standard.13 First, Medgraph failed to prove that Medtronic required the performance of certain method steps by patients and healthcare professionals.14 Patients were not denied the use of Medtronic’s system if they failed to perform steps of the claimed method and Medtronic did not offer incentives to encourage patient performance. Second, Medtronic gave patients latitude regarding when and how to provide their blood glucose data. For example, patients could print or email health data reports for their healthcare professional, or even bring their medical device to a provider to have the blood sugar data extracted. Accordingly, Medtronic did not exercise control of the timing or manner of their patients’ performance.15 With neither Akamai prong satisfied, the Federal Circuit affirmed summary judgment of non-infringement.16
Eli Lilly & Co. v. Teva Parenteral Medicines, Inc.
Eli Lilly & Co. owns a patent directed to a method of administering chemotherapy treatment along with certain vitamins to reduce the toxicity of treatment.17 Eli Lilly filed suit against multiple defendants who sought to market a generic version of the chemotherapy treatment with instructions to combine treatment with the vitamins claimed in Eli Lilly’s patent.18 While neither the patients nor the physicians individually performed every step of the method, Eli Lilly filed suit, arguing the patients’ conduct was attributable to the physicians and, therefore, the physicians directly infringed its patented method.19
Like Medgraph, the Federal Circuit reviewed the evidence under Akamai's two-prong standard because the patients were not bound by an agency relationship or legal obligation to the physicians.20 First, patients were required to take the prescribed vitamins as a precursor to receiving chemotherapy treatment.21 In fact, physicians could, and did, withhold chemotherapy treatment from patients if the patients did not take the specified vitamins.22 Second, the physicians controlled the timing and manner of the patients’ performance by instructing patients when to take the vitamins and specifying the vitamin dosage.23 Because both Akamai prongs were satisfied, the Federal Circuit held that the patients’ conduct was attributable to the physicians and affirmed the district court’s finding of direct infringement.24
The Medgraph and Eli Lilly cases provide an expanded look into how the Federal Circuit evaluates divided infringement under the Akamai standard. Both address specific factual circumstances in which physicians or healthcare entities may be liable for patient-physician interactions. However, because divided infringement is heavily dependent upon the facts at issue, these cases do not provide the full picture for the new standard. In Eli Lilly, the Federal Circuit acknowledged there are still open issues left unresolved: “Our holding today does not assume that patient action is attributable to a prescribing physician solely because they have a physician-patient relationship. We leave to another day what other scenarios also satisfy the ‘direction or control’ requirement.”25 Thus, we are likely to see more to come, with future cases refining the doctrine of divided infringement under Akamai.
1 Medgraph, Inc. v. Medtronic, Inc., 843 F.3d 942 (Fed. Cir. 2016); Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., 2015-2067, 2017 WL 117164 (Fed. Cir. Jan. 12, 2017). 2 Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015) (“Akamai V”) (citing BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1379–81 (Fed.Cir.2007)). See also Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318, 1329 (Fed. Cir. 2008) (“Muniauction”) (“where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises ‘control or direction’ over the entire process such that every step is attributable to the controlling party, i.e., the ‘mastermind.’”) (quoting BMC Res., 498 F.3d at 1380-81). 3 Akamai V, 797 F.3d at 1022. 4 Akamai Techs., Inc v. Limelight Networks, Inc., 786 F.3d 899, 908-09 (Fed. Cir. 2015) (“Akamai IV”). As noted above, the Federal Circuit in Muniauction held that liability for direct infringement is predicated on performance by or attribution to a single entity. The Supreme Court expressly refused to review the Muniauction standard in Limelight Networks, Inc. v. Akamai Techs., Inc. (“Akamai III”), instead assuming that the standard was correct. Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111, 2114, 2119-2120 (2014) (“Akamai III”). Muniauction may be a candidate for Supreme Court review based on critics’ attacks, including Judge Moore’s argument that the Muniauction standard is “inconsistent with statute, common law, and common sense.” Akamai Techs., Inc v. Limelight Networks, Inc., 786 F.3d 899, 916 (Fed. Cir. 2015) (Moore, J., dissenting). 5 See Akamai Techs., Inc v. Limelight Networks, Inc., 629 F.3d 1311 (Fed. Cir. 2010) (“Akamai I”); Akamai Techs., Inc v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012) (“Akamai II”); Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct. 2111 (2014) (“Akamai III”); Akamai Techs., Inc v. Limelight Networks, Inc., 786 F.3d 899 (Fed. Cir. 2015) (“Akamai IV”); Akamai Techs., Inc v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015) (“Akamai V”). 6 Akamai V, 797 F.3d at 1022. 7 Id. at 1022-23. For example, the court might evaluate if the third party acted as an agent of the alleged infringer or if the infringer had contracted with the third party to perform the remaining steps of the method claim. Id. 8 Note that Circuit Judges Taranto, Chen, and Stoll did not participate. 9 Akamai V, 797 F.3d at 1022-23. 10 Id. at 1023, n.1 (partially overruling Golden Hour Data Sys., Inc. v. emsCharts, Inc., 614 F.3d 1367, 1380 (Fed. Cir. 2010)). 11 Id. at 1023. 12 Medgraph, Inc. v. Medtronic, Inc., 843 F.3d 942 (Fed. Cir. 2016) (arguing infringement of the method claimed in U.S. Patent No. 5,974,124). Medgraph argued all of the steps of Medgraph’s method claim were performed by Medtronic, patients, or healthcare professionals using its CareLink® systems. See Reply Brief for Plaintiff-Appellant, 2016 WL 3215437. Medgraph further argued the third party conduct was attributable to Medtronic because it instructed performance of the claimed steps. Id. 13 Id. at 947-49. 14 Id. at 948. 15 Id. 16 Id. at 948-49. 17 U.S. Patent No. 7,772,209. 18 Eli Lilly & Co. v. Teva Parenteral Medicines, Inc., 2015-2067, 2017 WL 117164, at *1 (Fed. Cir. Jan. 12, 2017). 19 Id. at *4. 20 Id. at *4-7. 21 Id. at *5. 22 Id. at *5. 23 Id. at *6. 24 Id. at *7. 25 Id. at *7. See also id. at *4.